NOTICE TO
NEW AND EXISTING SHAREHOLDERS OF
MOUNTAIN CANAL IRRIGATION ASSOCIATION
NOVEMBER
2011
As
shareholders of Mountain Canal Irrigation Association we have and are enjoying
the benefits of a great water association that has been legally and well
developed and operated for many decades.
We desire that we continue to provide an efficient delivery system that
will benefit the Shareholders of the Association.
Pursuant
to numerous questions that are posed to the Trustees, Officers and Water Master
of Mountain Canal Irrigation Association, we have felt that it would be helpful
to provide the Shareholders with an overview of the Association and its
organization, operation and internal operating procedures. We believe that as the Shareholders understand
the concept of ownership of shares in the Association and the complexities of
the delivery and use of the system within the confines of our water rights,
that each Shareholder and the Association will be benefited and add to the ease
in operating our irrigation company.
The
Association was formed as a Utah Corporation and operates under guidelines.
Contracts and judicial decrees, the main documents being:
1921-1948 Second Judicial District Court Case
defining all water rights above Pineview Dam
1961 Contract between Weber
Basin Water Conservancy District and Mountain Canal Irrigation Association for
the sale and use of irrigation water-set forth the financial obligation for the
“sell of the perpetual right to use” water.
1962 Contract between United
States (Department of Interior, Bureau of Reclamation) and Mountain Canal
Irrigation Association-delineates the construction of the South Fork Diversion
Dam and the Ogden Valley Canal and the operation and maintenance
responsibilities of the parties.
1975 Bylaws of the Association
1987 Amendments to the
Articles of Incorporation-governing document of the Association
Ongoing Internal Procedures-adopted by
the Board of Trustees from time to time for the efficient operation of the
Company (copy attached for your file and review)
As
the use of the water has evolved from primarily agricultural to
agricultural/residential, the need to inform Shareholders of water issues,
monitor the appropriate use of the water according to each Shareholder’s stock
ownership, and to maintain the operational and procedural functions of the
Association continued to place additional challenges on the Officers, Trustees
and Water Master.
We
have attached a copy of some of the internal policies and procedures as they
pertain to the individual Shareholders that we believe will clarify some
questions and concerns of the Stockholders.
If you should have questions you may direct them to the Trustees and
Officers of the Association as applicable.
We
look forward to seeing you at the annual Shareholder water meeting to be held
the second Tuesday of April 2012.
Thank
you for your continued support.
Sincerely,
Mountain Canal irrigation Association
___________________________ __________________________
Ralph Bollom, President Kim
Sauer, Trustee
___________________________ __________________________
Jill Goff, Secretary Lon
Child, Trustee
__________________________
Zane
Froerer, Trustee
__________________________
Eric
Zenger, Trustee
Mountain
Canal Irrigation Association
Internal
Procedures
1.
Annual
Turn on and Shut Off of Water
Although annual weather
conditions, river flow and decisions by Weber Basin Water Conservation District
may and will alter the Associations ability to turn water into the delivery
system on a specific date and to shut off the water on a specific date, the
general guideline is:
Water
may be turned into delivery system May
1
Water
will be shut off November
1
2.
Responsibility
to Maintain Delivery System
Associations Responsibility:
·
To request adequate water to be delivered into
the Mountain Canal for the Shareholders use.
·
To maintain the Associations main delivery water
lines, to maintain Associations head gates, valves and other delivery apparatus.
·
The Association maintains the financial
responsibility to maintain all main line parts and processes for the efficient
delivery of water to the Shareholders.
Shareholders Responsibility:
·
Each Shareholder is responsible to maintain
their own ‘private line(s)’. Any financial cost for repair, maintenance,
additions or removal of these lines is the sole responsibility of the
Shareholder.
·
Each Shareholder is responsible to maintain
their private lines in such a manner that will keep them free of leaks so as to
not cause waste to occur.
·
Shareholders will notify Officers, Trustees or
Water Master of problems within the delivery system as they may occur.
·
When 2 or more Shareholders share a “private
line”, each shareholder shall be responsible for his proportionate share of
labor and financial costs for the repair and maintenance of the lines.
Association Intervention in
Repair and Maintenance of Private Lines
Should repair and maintenance be required on a
private line, which repair is necessitated to: 1) conserve water due to leakage
or is 2) required to protect an adjoining property owners property or is 3)
necessary in order to provide for the delivery of water to other users on the
same main line, the private line shall be repaired by the Shareholder within a
48 hour period. This requirement to
repair shall be enforced no matter what cause may have led to the needed
repair.
Should Shareholder fail to act within the prescribed
48 period, the Association may intervene and cause such repair to me made.
Any costs associated with the repair or maintenance
including time, materials and travel shall be billed to the Shareholder and
shall be the Shareholder’s sole responsibility to pay.
Any non-payment of the costs of repair shall be
levied against the Shares of said Shareholder’s stock in the Association. Non-payment shall be considered the same as
non-payment of the water assessment and shall result in the loss of rights to
use water and may result in the public auction for sale of Shareholder’s stock.
3.
Duties
of the Water Master:
·
In conjunction with the Officers and Board of
Trustees, manage the efficient delivery of water to the Shareholders.
·
Monitor Association’s system and supervise the maintenance
and repair of the System.
·
Monitor Association’s annual allocation of water
and report to the Board of Trustees.
·
In conjunction with Weber basin monitor water
flow into Association’s systems.
·
Monitor Shareholder’s usage of water.
·
Assess the ongoing condition of all Association
main lines.
·
Turn on water systems in Spring and shut down
system in the Fall.
4.
Duties
of the Secretary/Treasurer:
·
Maintain current roster of Shareholders.
·
Facilitate the transfer of shares as authorized
by the Board of Trustees.
·
Maintain accounting system for the recording of
revenues and expenses of the Company.
·
Dispense funds as directed for the payment of
Associations obligations.
·
Provide financial reports to Board of Trustees.
·
Send out water assessments as approved by Board of
Trustees and collect and deposit revenue.
·
Prepare minutes of all Association meetings.
5.
Water
Assessment and Collection:
·
Annually, the Board of Trustees set the
assessment for shares for both Class I Stock and Class II Stock
·
Invoices are mailed to all Shareholders on or
about________ annually.
·
Any assessment not paid by ________ is
considered delinquent.
·
Notice is given to Shareholder of delinquent
status and Shareholder is given _____days to cure default.
·
If default is not cured:
§ Water
shares are noticed for sale at a designated place and time
§ Shares
may be purchased by only existing Shareholders of the Association
The formal policy and procedure
for assessment and collection is as follows:
MOUNTAIN CANAL IRRIGATION ASSOCIATION
ASSSESSMENT OF SHARES AND COLLECTION OF ASSESSMENT
Assessment of
Shares.
The shares of this Company shall be
subject to a yearly assessment. In making such assessment, the Board of
Trustees shall take into consideration the purpose of use of the water, the
flow of water in the delivery system, the sources of such water, and the cost
of constructing, operating and maintaining the water facilities involved in
making delivery of water, as well as any other relevant, necessary Company
expense. The shares shall be equitably
assessed for general Company purposes, including, but not limited to, expenses
of administration of the Company water systems and of constructing,
reconstructing, operating and maintaining facilities used. Additionally, the
Board of Trustees shall have the authority to set the shareholder assessments,
taking into consideration the shareholder's use (whether it is agricultural,
commercial, or residential in nature). Each issued share certificate shall be
assessed an annual base assessment fee.
The base fee shall be set by the Board of Trustees. The Board of Trustees shall have the right to
call for and require from each shareholder a payment for any special
assessments; i.e., major repairs, storage systems, or maintenance of the
pressurized system, etc. In the event
the Board of Trustees undertakes a major expense project, it may allow
shareholders to pay their special assessments on a monthly basis. Finally, the
Board of Trustees may assign different assessments for pumping, maintaining, or
servicing a particular diversion point or delivery system which benefits a
particular shareholder or shareholders.
The penalty for a shareholder failing to make the payment is explained
in the following section, the paragraph defining collection of assessments.
Collection of
Assessments.
This Company shall follow the
provisions outlined in the Utah Code for the collection of assessments. The applicable Utah Code cite is 16-4-201
through 16-4-312. The code shall be the
guide for the Board of Trustees, unless stated differently in the bylaws of
Mountain Canal Irrigation Association. If the bylaws are different than the
code, the bylaws shall supersede.
Each shareholder shall pay the
annual assessment on a timely basis. The Board of Trustees may take the
following action to collect the Company assessments. If payment of the assessment is not made
within 30 days of the date of assessment, the assessment shall be determined
delinquent.
For delinquent assessments, the Company may:
a.
impose a late charge, a penalty, and/or impose an interest fee on any late
assessment;
b. suspend any benefit to which the shareholder
may be entitled, including the right to vote, transfer shares, and/or to
receive water through the Company delivery system;
c.
sell at a public auction the share(s) on which payment is delinquent; and
d. any other enforcement method stated herein,
including bringing legal action in a court of competent jurisdiction.
Any assessment
not paid within thirty (30) days shall be assessed a one and one half percent
(1 ½ %) late fee per month until paid in full, and must be paid in full before
any transfer of shares may be considered by the Board of Trustees. If any assessment has not been paid within
_______________ days after it becomes due and the shareholder has failed to
make acceptable payment arrangements in writing with the Board of Trustees, the
Board of Trustees may take action to collect on the assessment. Action may, in the Board of Trustees’
discretion, include selling the shareholder’s share(s) in the following manner:
a. sending a NOTICE OF SALE to the
shareholder at the address shown on the Company record. The notice shall be served or mailed at least
15 days, but not more than 30 days before the day on which the sale is to occur;
and
b. publishing a NOTICE OF SALE in
a newspaper of general circulation once a week for two weeks at least 15 days
but no more than 45 days before the sale is to occur.
Any
sale of shares shall be subject to the restrictions of delivery and water area
boundary, as stated in these bylaws in Article VIII Sections 2 and 3. In the event the Board of Trustees elects to
sell a shareholder’s share(s) due to non-payment, the Board shall include in
the amount owing all late fees, interest, expenses, including reasonable
attorneys fees, transfer fees, and any other reasonable expenses associated
with the delinquent shares. In the event the share(s) is/are sold, the proceeds
from the sale are to be credited toward the assessments and expenses the
share(s) is/are accountable for, and interest that may have accrued, and legal
expenses, including a reasonable attorney’s fee, and any court costs. If there is any balance remaining after the
payment of the above noted expenses, the balance shall be delivered to the
former shareholder.
Should
the Company or an Officer or Trustee of the Company purchase the shares,
pursuant to the outline procedure above, the shares shall be subject to
redemption by the Shareholder for a period of thirty (30) days following the
day on which the shares are sold at auction.
Such redemption price shall include all delinquent assessments and all
other amounts payable on the day of the sale plus interest and costs associated
with noticing the shares for sale to the date that the shares are redeemed.
Any Shares purchased by the Company
shall be held as Treasury Stock and shall not be assessable. The Company may sell the Treasury Shares at
the sole direction of a majority of the Trustees.
6.
Nature
of Classes of Stock:
Class
I Stock:
·
Sometimes referred to as Primary Shares
·
Voting stock
·
589 ½ shares authorized and outstanding
·
Own equity of Association’s assets
Class II Stock:
·
Sometimes referred to as Secondary Shares
·
Non-Voting stock
·
1 share represents the right to use 1 acre foot
of water to be increased or decreased based upon the supply of water in Causey
Reservoir.
·
(481 or 538) shares
·
No ownership of equity
7.
Who
Owns Water:
All
water is under the ownership and control of Mountain Canal Irrigation
Association.
8.
Who
Can be a Class I Shareholder:
·
Owners or successors in interest to owners of the 589 ½ shares of
stock originally issued by the Company.
·
Class I shares cannot be transferred out of the
Association’s boundaries so as to sever the water right from the real property
benefited thereby.
·
Class I shares cannot be transferred to obtain a
well permit.
9.
Who
Can be a Class II Shareholder:
·
Owners or successors in interest to owners of
the _______ Class II shares of stock
·
Must be used inside water distribution systems
of the Association.
10.
Transfer
of Shares:
·
When a Shareholder sells or conveys real estate
ownership, every effort shall be made to convey any and all shares of
Association stock that are applicable to the real estate to the new
owners. The transfer procedure is as
follows:
§ Fill
out transfer statement on the reverse side of the stock certification
§ Provide
stock certification to the Associations Secretary/Treasurer.
§ Board
of Trustees approve transfer
§ New
certification is created for new owner
§ Transfer
fees apply
§ All
assessments must be current at time of transfer
§ If
original stock certificates are lost, Shareholder shall cause to have an
affidavit of lost certificate to the Secretary/Treasurer whereupon a new
certificate will be issued
11.
Usage of Water:
·
The water delivery system is based on continuous
flow and no storage facilities are owned or maintained by the Association. Accordingly, the Shareholder’s of the
Association, in order to not disrupt the pressurized system, need to manage
their irrigation in such a way as to use it on a 24 hour per day basis.
·
Due to the engineering of the pressurized
system, pumps shall not be attached to any private lines within the pressurized
system. To do so disrupts the
engineering of the system and takes water from one shareholder at the expense
of and injury to another.
·
Any value or apparatus that has the effect of
either increasing or reducing flow or pressure to individual shareholders shall
not be installed into a private line without the express written approval of
the Association.
·
A shareholder’s Share of water does not allow
for an unlimited use of water. In some
cases within the Association a shareholder may own land without adequate water
shares to irrigate the land in a manner they deem needed. In other cases a shareholder may have more
shares of water than are needed to appropriately water their property. All shareholders should honestly assess their
share ownership relative to the area that they are irrigating to insure that
they are using only their allotted amount of water commensurate with their
share ownership.
The following is a guideline:
For Class I (primary share)
owners:
1 share will water appx. 2.5 acres over a 14 day
cycle.
For Class II (secondary share)
owners:
1 share (1 acre foot of storage
water) will water ¼ of an acre over a 14 day cycle. It would take 4 acre feet of Class II water to water 1 acre of ground
ever 14 days.
·
If you should have questions about your
individual water shares or watering practices, please feel free to contact the
water master.
·
In times of water shortages, the Association may
ration the water in such a way as to be equitable to the shareholders.
